Correlation Between Air Lease and Aarons

Can any of the company-specific risk be diversified away by investing in both Air Lease and Aarons at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Air Lease and Aarons into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Air Lease and The Aarons, you can compare the effects of market volatilities on Air Lease and Aarons and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Air Lease with a short position of Aarons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Aarons.

Diversification Opportunities for Air Lease and Aarons

0.0

Correlation Coefficient

Air Lease  Aarons

Pay attention - limited upside

The 3 months correlation between Air and Aarons is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and Air Lease is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Air Lease are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of Air Lease i.e., Air Lease and Aarons go up and down completely randomly.

Pair Corralation between Air Lease and Aarons

If you would invest  4,935  in Air Lease on December 26, 2024 and sell it today you would lose (33.00) from holding Air Lease or give up 0.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Air Lease  vs.  The Aarons

Air Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Air Lease is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Aarons

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Aarons has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aarons is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Air Lease and Aarons

The main advantage of trading using opposite Air Lease and Aarons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Aarons can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aarons will offset losses from the drop in Aarons' long position.

The idea behind Air Lease and The Aarons pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.